Mandatory UK Registration Does Not Deny ‘New Car’ Status: CESTAT Grants 60% Concessional Duty on Imported Bentley [Read Order]

The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that a car imported into India remains “new” for customs purposes even if it was registered abroad before export, provided the registration was a legal requirement and the car was unused.

Jatin Ahuja, Director of Big Boyz Toyz, imported a Bentley Flying Spur Automatic from the United Kingdom in October 2009 for personal use. The declared value was Rs. 73.84 lakh, based on an invoice from A.K. International (IE) Ltd., UK, quoting GBP 91,500.

Customs duty was paid at the concessional 60% basic rate under Serial No. 344 of Notification No. 21/2002-Cus, applicable to new and unregistered cars. The vehicle had only 123 km on the odometer at import.

In 2014, the Directorate of Revenue Intelligence (DRI) alleged that the car was not “new” because it had been registered in the UK before export and that its value was understated, citing UK HMRC data showing a higher showroom price of GBP 1,09,850.

The Principal Commissioner re-determined the value at Rs. 88.61 lakh, denied concessional duty, demanded Rs. 61.93 lakh in differential duty with interest, confiscated the car with an option to redeem on fine, and imposed penalties on Ahuja, the buyer, the customs broker, and its employee.

The appellant’s counsel argued that UK law required mandatory registration before export, which did not imply that the car was used. The car’s minimal mileage and inspection findings proved it was new. They argued that mandatory registration abroad does not affect “new” status for customs purposes.

The revenue counsel argued that registration abroad disqualified the car from “new” status and justified rejecting the declared value in favour of HMRC pricing.

The division bench comprising S.K. Mohanty (Judicial Member) and P.V. Subba Rao (Technical Member) reviewed the Port Health Officer’s inspection report at the time of import which confirmed the vehicle was unused and in new condition

The tribunal confirmed that the car was new when imported, and mandatory UK registration was a legal formality, not proof of use.

HMRC’s price list was a general showroom price, and there was no evidence that the importer paid more than the declared GBP 91,500. There was no valid ground under Rule 12 of the Customs Valuation Rules to reject the declared value.

The tribunal held that the car qualified as “new” and the concessional 60% duty rate applied. The tribunal set aside the revaluation, duty demand, confiscation, and all penalties, allowing all four appeals.

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